Mixed Q1 Results for Havas, MDC

BOSTON Both Havas and MDC Partners on Tuesday reported decidedly mixed first-quarter results, but pointed to gains in organic growth as positive signs for the future.

Havas said it tallied first-quarter global revenue of approximately $424 million.

That number was down 7.5 percent on an unadjusted basis compared to the same period a year ago, but was flat (edging up 1.4 percent) in terms of organic growth, which takes into account fluctuations in exchange rates (notably the 4.5 percent decline in the dollar), acquisitions and closures, Havas said.

The 1.4 percent uptick represented a doubling of organic growth (from less than 1 percent) over the same period a year ago.

New business revenue rose 45 percent in Q1 2005 compared to last year on wins such as Jaguar, LG Electronics, ESPN Mobile and Lukoil, according to Havas.

“The first quarter has reinforced our confidence in achieving our objectives for 2005,” said Havas CEO Alain de Pouzilhac in a statement. “The additional new business gains at the start of the second quarter, including … the RadioShack account won by Arnold, suggest that our organic growth should be higher in 2005 than it was in 2004.”

In addition to Arnold, Havas also owns Euro RSCG and Media Planning Group.

Havas faces a challenge on June 9 at its shareholders meeting in Paris, where investor Vincent Bolloré (who owns more than 20 percent of the company) will press for three seats on its board of directors, a move Havas opposes.

Separately, Toronto-based MDC today said revenue for Q1 improved 35 percent to $92.4 million compared to the same period a year ago.

“We are enthusiastic about the strong double-digit organic revenue growth our businesses delivered in the quarter,” said MDC CEO Miles Nadal in a statement.

MDC’s net loss for the quarter was $3.8 million, compared with a nearly $10 million profit for Q1 2004. MDC said the loss from continuing operations included a pre-tax net gain on an asset sale of $100,000, compared to a pre-tax net gain on asset sales and settlement of debt of $16.3 million for the same quarter a year ago. Excluding the impact of those gains, the pre-tax loss was $2.4 million in Q1 2005 versus a pre-tax loss of more than $6 million a year ago, the company said.

The diluted loss per share for the quarter was 17 cents, compared with diluted earnings of 47 cents per share a year ago.

MDC owns Crispin Porter + Bogusky, Kirshenbaum Bond + Partners, Cliff Freeman and Partners and recently acquired Atlanta-based marketing consultancy the Zyman Group, among others.